Regional Spillover Risks for the South Caucasus and the Caspian

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Iran is once again at the center of regional attention, as protests, repression, and diplomatic maneuvering intersect in ways that feel familiar – yet increasingly unsustainable. Despite waves of unrest and mounting economic pressure, expectations of an imminent collapse of the Islamic Republic remain misplaced. What is changing, however, is the regime’s legitimacy – both at home and abroad.

Over the past months, Iranian authorities have relied on force to suppress protests that erupted across multiple cities. According to estimates cited by Iranian officials and independent observers, thousands have been killed or detained during crackdowns. While exact figures remain contested, the scale of violence is widely acknowledged even within Iran’s own political establishment.

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This level of repression has achieved short-term control, but at a strategic cost. Regimes that govern primarily through fear tend to erode their own foundations over time. Public trust – already fragile after years of sanctions, inflation, and currency collapse – continues to weaken.

Why Pressure Alone Is Not Enough

Western policymakers often assume that economic sanctions and diplomatic isolation will accelerate regime change in Tehran. The reality is more complex.

Iran’s leadership has spent decades adapting to pressure. Sanctions have reshaped the economy, but they have not broken the system. Instead, they have reinforced a survival model based on internal repression, regional proxy networks, and alternative international partnerships – most notably with Russia and China.

This alignment is pragmatic rather than ideological. Tehran, Moscow, and Beijing do not share a unified worldview; they share a common interest in weakening Western leverage. For Iran, closer ties with Russia and China offer political cover, limited economic breathing room, and strategic relevance in a fragmented global order.

As a result, external pressure often strengthens hardliners inside Iran rather than empowering reformist forces. The leadership frames unrest as foreign-instigated and uses external threats to justify internal crackdowns.

The Regional Dimension

For countries in the South Caucasus and Caspian region, Iran’s internal trajectory matters deeply – even without dramatic regime change.

Iran is not an isolated actor. It is a transit country, an energy player, and a security variable. Any prolonged instability inside Iran affects trade routes, energy logistics, migration flows, and regional security calculations.

A sudden collapse of state authority in Iran would create risks rather than opportunities for neighboring states. Fragmentation, uncontrolled migration, and the emergence of armed non-state actors would destabilize the wider region. For this reason, regional governments tend to view Iran’s internal crisis with caution rather than enthusiasm.

A weakened but functioning Iran is one scenario; a fractured Iran is another – far more dangerous – outcome.

Why Azerbaijan Is Watching Closely

For Azerbaijan, developments in Iran are not abstract. The two countries share geography, economic links, and sensitive security dynamics.

Baku’s primary interests lie in stability, predictable borders, and uninterrupted transit and energy routes. Iran’s domestic turmoil intersects with Caspian security, regional transport corridors, and broader geopolitical competition involving Russia, Turkey, and China.

At the same time, Azerbaijan has consistently avoided framing Iran’s internal crisis in ideological terms. The focus remains practical: preventing spillover, managing risks, and preserving regional balance.

No Quick Endgame

Despite growing dissatisfaction inside Iran, history suggests that authoritarian systems rarely fall quickly. The Islamic Republic retains key instruments of control: security forces, centralized power structures, and the ability to suppress dissent decisively.

However, legitimacy loss is cumulative. A regime can survive years – even decades – after crossing a critical trust threshold, but it does so at rising cost. Economic decay, demographic pressure, and elite fragmentation gradually narrow the margin for error.

The current phase in Iran is less about imminent collapse and more about long-term erosion. The system is holding – but it is aging, brittle, and increasingly dependent on coercion rather than consent.

What Comes Next

For now, Iran appears locked in a cycle of repression and endurance. External actors may influence the tempo, but not the direction, of change. The decisive factors will remain internal: economic sustainability, elite cohesion, and the population’s tolerance for repression.

For the region, the priority is not dramatic transformation but managed stability. The lesson from recent history is clear: chaos travels faster than reform.

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